-- The butler, apparently, didn't do it.

Paul Burrell, the royal servant accused of stealing 310 items belonging to the late Princess Diana and her family, walked free from the Old Bailey today after a surprise intervention by Queen Elizabeth. She said Burrell had told her he had taken some of her late daughter-in-law's papers for safekeeping.

The queen's statement, issued by Buckingham Palace, caused the prosecution to withdraw all charges. Prosecutors and police had claimed that Burrell had told no one he had the items, which included some of Diana's most intimate possessions -- designer clothing, gifts, personal mementos and letters to her two sons and other family members.

"I'm thrilled, so thrilled," sobbed Burrell, who burst into tears when the judge announced his acquittal and was still drying his eyes when he emerged from the courthouse an hour later. "The queen has come through for me."

It was a dramatic ending to a riveting saga of loyalty, betrayal and family feuds, starring one of England's most enduring stereotypes: the discreet and reliable family retainer. The prosecution had sought to portray Burrell, 44, who worked for the palace for 26 years, as an opportunist who cached hundreds of the princess's possessions for his personal use and hoped to sell them for huge profits. His defenders said the butler, whom Diana had once called "my rock," had passed the ultimate loyalty test by quietly rescuing some of her most treasured possessions from hostile family members and storing them for safekeeping.

The sudden ending left a trail of embarrassment and confusion. Among the questions: Why hadn't the queen come forward sooner to exonerate her former footman? Why hadn't police and prosecutors followed up on the butler's 39-page written statement in which he said he had had a private meeting with the queen in the weeks following her daughter-in-law's death in August 1997? And why hadn't Burrell himself revealed the contents of the meeting?

Andrew Shaw, one of Burrell's attorneys, attributed his silence to a well-honed sense of discretion. "It is to his utmost credit and typical of the man that it was only this week that he instructed his lawyers as to the full terms of the conversation," Shaw said in a statement. But the butler could have saved the royal family much embarrassment, himself an ordeal, and the crown more than $2 million in legal fees, if he had divulged what he knew sooner.

The case began to unravel a week ago, when the queen mentioned her meeting with Burrell to Prince Charles and her husband, Prince Philip, while the trio were riding to a memorial service at St. Paul's Cathedral for the victims of the Bali terrorist bombing. Charles immediately took the information to the police, who passed it on to prosecutors on Monday. On Tuesday, the trial, entering its third week, was postponed without explanation.

Buckingham Palace released a statement saying the queen had not been briefed or questioned about the prosecution's case and only realized the potential importance of her information after discussing it with her son

In his own statement, prosecutor William Boyce said police and prosecutors did not follow up on Burrell's original 39-page account because he never told them he had informed the queen that he had taken the possessions. "I am informed that because the queen's personal property was not involved, and because of concerns to avoid any suggestion that Buckingham Palace was trying to interfere with the investigation of this case, the queen was not briefed on the way in which the case against Mr. Burrell was being prepared," Boyce said.

Boyce said the case was dropped because "there would no longer be a realistic prospect of conviction."

But Shaw, Burrell's lawyer, told reporters, "The prosecution was based on numerous errors." Reading from a statement with his client by his side, Shaw said, "It's surprising that no inquiries were made of the queen in relation to that meeting."

He added: "Mr. Burrell remains deeply loyal to the late Diana and to the queen."

The son of a truck driver, Burrell began working for the palace at age 17. After 10 years as the queen's footman, he went to work for Charles and Diana in 1986, and went with her staff after she and the prince separated in 1992.

He traveled constantly with Diana and became one of her closest confidants. After her death, it was Burrell who dressed her body for her funeral and burned the bloodstained clothes she was wearing during her fatal car crash. He was so distraught at her death, a fellow worker testified, that there were fears he would commit suicide.

But Diana's mother, Frances Shand Kydd, and two sisters, testifying for the prosecution, said Burrell exaggerated his importance to Diana. "My rock," Shand Kydd told the jury, was "a term [Diana] used for many people."

A security guard said he witnessed Burrell removing two evening dresses and a mahogany box from Diana's apartment at Kensington Palace at 3:30 a.m. soon after her death. Diana's sisters testified he had not been authorized to remove these and other items and had not informed them that he did so.

Among the possessions police found when they raided his home in January 2001 were 15 handbags, a lilac dress, more than 3,000 photo negatives, including some of Diana's young sons William and Harry in the bath, a letter Prince Charles had sent her on their 13th wedding anniversary, and 13 cards and letters from her to William, including one that begins "My darling Wombat."

But there was embarrassing testimony for the family as well. Shand Kidd admitted she hadn't seen Diana for four months before her death because of a quarrel and that the princess had returned her letters unopened. Diana slammed down the phone to terminate a call with her brother, Charles Spencer, after Spencer withdrew an invitation for her to use a guesthouse on Althorpe, the family estate.

The police also came under attack. The chief inspector in the case, Maxine de Brunner, testified she helped persuade Prince Charles and Prince William to press charges against Burrell by telling them he wore some of Diana's clothes at parties and sold some of her possessions abroad. De Brunner said she never informed the princess that these allegations turned out to be false.

Paul Burrell, formerly Princess Diana's butler and confidant, gives the media a thumbs-up as he leaves the Old Bailey Court in London.Paul Burrell waves to reporters outside the Old Bailey courthouse in London after prosecutors dropped all charges.